Why did Windows 95 setup use three operating systems?

Raymond Chens blog and book (The Old New Thing) is an absolute delight! I always had a big respect for how intuitive the Windows 95 GUI is, and reading his description of the thoughts and methods behind its inception, it's no surprise that it became so good. It seems like Microsoft was extremely pragmatic and reasonable in many of their endeavors back then. It's a wonder how it degenerated into the absolute unit of sh*t that is modern Windows (even if the filesystem and kernel is arguably a lot better, everything on top seems to be developed by an army of interns)

I know at one point Microsoft and IBM both invested significantly in studying UX research. It doesn't feel like that's happening or if it is, I guess I must be drifting out of touch with what's considered intuitive in user interfaces. It's not just MS either, I feel like the ability to discover what you can do in an app/site any more is hidden by aesthetic choices over functional ones.

I remember being pulled into user surveys and usability studies while wandering the mall back in the day and being given series of tasks to accomplish on various iterations of a windows GUI (in the Windows 9x era) while they observed, and then paid $100 for my time for each one I participated in.